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Business

PEZA pushes review of investment laws

Louella Desiderio - The Philippine Star

MANILA, Philippines — The Philippine Economic Zone Authority (PEZA) is recommending a review of existing laws affecting investments and institutionalizing the work-from-home (WFH) arrangement under the new administration.

In a Viber message yesterday, PEZA director general Charito Plaza said that among the recommendations of the PEZA to the new administration is to “review investments, trade and economic related policies and laws.”

She said the PEZA wants the review to include the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, which reduced the corporate income tax rate and introduced changes to the incentives system.

She said there is a need to look into the investment promotion agencies’ incentives and authority.

Under the CREATE, the inter-agency Fiscal Incentives Review Board (FIRB), chaired by the Department of Finance and co-chaired by the Department of Trade and Industry, is mandated to oversee the grant of incentives for projects with investments amounting to more than P1 billion.

Meanwhile, those below the threshold are cleared by investment promotion agencies including PEZA.

Plaza also recommends that the next administration synchronize laws affecting WFH.

Earlier, she said the PEZA would want the incoming administration to institutionalize the WFH arrangement for firms operating in ecozones, particularly information technology- business processing outsourcing (IT-BPO) companies.

IT-BPO firms located in ecozones have to operate on-site to enjoy their tax perks.

Amid the pandemic, the FIRB allowed IT-BPO firms to implement the WFH arrangement for up to 90 percent of the workforce without any effect on their incentives until March 31 this year.

While the WFH arrangement for up to 90 percent of the workforce has expired, IT-BPO firms with letters of authority from the PEZA are allowed to implement 30 percent WFH scheme until Sept. 12 this year or the end of the declaration of the COVID state of calamity.

Plaza also wants the next administration to focus on the development of ecozones and logistics transportation hubs as part of efforts to entice more investors to the country.

“Ecozones are proven to trigger the growth of LGUs (local government units), MSMEs (micro, small and medium enterprises) who become suppliers to exporters or become exporters themselves,” Plaza said.

The PEZA was recently awarded by London-based print and online publication Capital Finance International (CFI.co) for Best Economic Zone Promotion in Southeast Asia for 2022.

According to CFI.co, PEZA acts as a catalyst for sustainable development in the Philippines by focusing on manufacturing, tourism, industrial exporters, and land and building developers.

“It (PEZA) provides a complete service to investors, assisting with business registration, tax incentives, and operational support,” CFI.co said.

Following the recognition from CFI.co, Plaza said PEZA intends to continue to provide excellent service to locator companies, investors and the public through its one-stop-shop and by promoting ease of doing business.

“We aim to grow and expand our economic zones, particularly outside the National Capital Region by virtue of Administrative Order 18 and geared by our Transformation Road Map,” she said.

As of the first quarter, the PEZA approved P8.14 billion worth of investments, 68 percent lower than the P25.38 billion in the same period last year.

Plaza said earlier, investments in ecozones are expected to increase after the elections.

PEZA is aiming for a seven to eight percent growth in approved investments this year.

Total investments approved by the agency reached P69.30 billion last year.

PEZA

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